CNA Said to Seek Buyer for $500 Million Annuities Unit

Oct. 1 (Bloomberg) -- CNA Financial Corp., the insurer
controlled by Loews Corp., is looking to sell its payout
annuities business to focus on property and casualty coverage,
three people with knowledge of the matter said.

CNA is working with Morgan Stanley to find buyers for the
unit, which makes payments to retirees and people injured in
accidents, said the people, who asked not to be identified
because the matter is not public. The business could fetch about
$500 million, two people said.

Insurers are exiting businesses including life coverage and
annuities that are struggling when interest rates are low.
Allstate Corp. said in July that it will stop issuing fixed
annuities at the end of this year, and Sun Life Financial Inc.
in August sold its U.S. annuity business for $1.35 billion.

Jennifer Martinez-Roth, a spokeswoman for Chicago-based
CNA, declined to comment on the potential sale as did Mary
Claire Delaney, a spokeswoman for Morgan Stanley.

The unit had net reserves of about $2.6 billion at the end
of June, according to CNA’s second-quarter report. It hasn’t
been adding new business for at least 9 years, D. Craig Mense,
CNA’s chief financial officer, said during an investor
conference in May, according to a transcript of the event.

“Performance had been a drag on the results,” Mense said.

Apollo Global Management LLC, Guggenheim Partners LLC are
among private-equity firms have been seeking to buy annuities in
recent years, betting they can wring more profits from them than
the insurers.

Loews, the New York company run by the Tisch family that
controls insurance, energy and hospitality businesses, owns
about 90 percent of CNA’s common stock, according to data
compiled by Bloomberg.

CNA climbed 3 cents to $38.21 at 12:59 p.m. in New York,
after falling as much as 31 cents earlier in the day. Loews
advanced 0.9 percent.